After earlier setting out his Budget, Chancellor Rishi Sunak tells a No 10 briefing "our plan is working"
But he warns "it is going to take us a long time to fully recover from the damage coronavirus has done to our economy"
Sunak defends his plan to increase corporation tax to 25% from 2023, saying it is "still an internationally competitive rate"
A million more people will also start paying income tax - Sunak promises taxes will be spent on funding "strong public services"
The furlough scheme - which pays 80% of employees' wages - will be extended until the end of September
Universal credit top-up of £20 per week will continue for a further six months
But Labour leader Sir Keir Starmer calls it a Budget that "papers over the cracks"
He says there is no plan to "fix" social care or the NHS or to address inequality
Image source, PA MediaThe chancellor says his corporation tax decisions might not be "popular" but they are "honest" and "responsible".
He announces that, to boost investment, there will be a "super deduction" in tax for companies that invest in innovation.
Rishi Sunak says in 2023 he will raise corporation tax to 25%.
He adds that the UK will still have lowest corporation tax in the G7.
He also says he is creating a Small Profits Rate to ensure only businesses with profits of over £250,000 will be taxed at the 25% rate.
"That means only 10% of all companies will pay the full higher rate," he says.
On income tax, the threshold for paying the basic rate will rise to £12,570 next year.
For higher-rate payers, the threshold will be £50,270.
Both rates will stay the same until 2026.
And the VAT registration threshold will remain at £85,000 until 2024.
Image source, HoCRishi Sunak says he wants to be honest about challenges facing the country and sets out his "three fiscal principles".
First, it is right to help people through an acute public crisis but in normal times the state should not be borrowing to pay for everyday public spending.
Second, he says we cannot allow debt to keep rising.
And thirdly he says it is sensible to take advantage of lower interest rates to invest in capital projects.
Paul Johnson, director of the Institute for Fiscal Studies think tank tweets:
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Forecasts show the UK government has borrowed £355bn this year, Rishi Sunak says. Next year this is expected to be £234bn, he adds.
Borrowing will fall in 2022/3, as a proportion of national income, the chancellor says.
It will be the work of "many governments over many decades" to pay back the country's debts, he adds.
Borrowing costs are "affordable right" now but rises in interest rates might alter this, Sunak says.
Image source, HoCSummarising the packages, Rishi Sunak says the government has announced an additional £65bn of measures to support the economy.
"Taking into account the significant support announced at Spending Review 2020, this means our total Covid support package, this year and next, is £352bn," he says.
He adds that including measures announced last year "total fiscal support over this year and next amounts to £407bn."
Image source, PA MediaThe chancellor announces the up-to-£500,000 "nil-rate band" for stamp duty will finish at the end of June, rather than the end of March, as planned.
He says first-time buyers will get a "government guarantee" on mortgages, with a deposit of 5%. Many big lenders are already backing the scheme, Rishi Sunak announces.
Rishi Sunak confirms that the business rates holiday will be extended through to the end of June.
"For the remaining nine months of the year, business rates will still be discounted by two thirds, up to a value of £2m for closed businesses, with a lower cap for those who have been able to stay open," he says.
On VAT, he also confirms the 5% reduced rate of VAT will be extended for six months to 30 September followed by interim rate of 12.5% for another six months.
The standard rate will not return until April next year.
The chancellor says this makes for a £5bn cut in VAT.
Image source, HoCChancellor Rishi Sunak is delivering his Budget to the Commons. He's been speaking for about 20 minutes.
Here's what he's told us so far:
The chancellor says sporting, cultural and arts organisations will get £700m to help them reopen. He also promises to back the joint UK and Ireland bid to host the 2030 World Cup.
Image source, PA MediaTurning to funding for business, the chancellor says there will be a new Restart Grant in April, "to help businesses reopen and get going again".
He says non-essential retail businesses will receive grants of up to £6,000 per premises.
Hospitality and leisure businesses will get grants of up to £18,000.
"That’s £5bn of new grants; on top of the £20bn we’ve already provided; taking our total direct cash support to business to £25bn," he says.
Image source, Getty ImagesRishi Sunak says domestic abuse has been one of the "hidden tragedies" of the pandemic and says he will provide an extra £19m for domestic abuse programmes.
He also announces £10m to support veterans with mental health needs and a £40m down payment for victims of the Thalidomide scandal - and a guarantee for future funding.
Jonathan Blake
BBC political correspondent
Rishi Sunak starts by reflecting on everything that's changed in the last year since his first Budget - and painting a bleak picture of the state of the economy.
The damage done by the pandemic is "acute" he says, including rising unemployment, shrinking growth and the highest level of borrowing in peacetime.
Coronavirus is still doing "profound damage" and it will take "a long time to recover".
Although the chancellor plans to begin the work of rebuilding the economy in this budget, his assessment shows that the treasury is in many ways still in survival mode, providing vast sums to try to prop up the economy while restrictions remain in place.
The chancellor says furlough will continue until September, with no change of terms. After July, businesses will be asked for a 10% contribution, rising to 20% in August and September.
Support for the self-employed will also continue until September.
As the economy reopens in the summer, the government will help people whose turnover has fallen by 30% or more the most, the chancellor says. The government will have sent £33bn supporting the self-employed during the crisis, he adds.
And the universal credit uplift of £20 a week will also go on until September.
The National Living Wage will rise to £8.91 from April.
Image source, HoCRishi Sunak says the government's response to coronavirus is working.
He says the Office of Budget Responsibility are now forecasting a "swifter and more sustained recovery than expected".
The economy will return to pre-Covid level by the middle of next year, he says.
However he adds that Covid-19 has done damage.
He says the economy will be 3% smaller in five years than it would have been.
"The OBR forecast that our economy will grow this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast."
Rishi Sunak begins by saying the pandemic has "fundamentally altered" people's lives. But one thing "has stayed the same", he adds - that he will do "whatever it takes" to help.
The chancellor adds that more than 700,000 people have lost their jobs, the economy shrank by almost 10% last year and borrowing is up.
But the economy "will recover", Sunak says, and that, once recovery begins, the government will begin fixing the public finances.
Image source, HoCChancellor Rishi Sunak is now on his feet to begin his Budget statement.
Stay with us for updates.
Dharshini David
Economics Correspondent
Tax now - or wait and risk a debt mountain?
Sir Robert Chote - the man who oversaw the official forecasts, and policed the Treasury’s financial housekeeping for a decade - is urging caution.
The former chairman of the Office of Budget Responsibility told me on Radio 4’s Today programme that taxes would have to rise but that the Chancellor shouldn’t “go at it too aggressively in case you weaken the recovery”.
The UK's public sector net debt is £2 trillion - equal to 100% of the country's GDP
Shortly before stepping down last summer, he recommended the government take a blanket approach to underpin the economy. “When the fire is large enough, you spray the water and worry about it later”, he said then.
By advising a cautious approach to cleaning up the public purse, he underlines how different thinking is to the austerity aftermath of the financial crisis.
The government may have to live with a bigger deficit than we’re used to for a few years.